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Taxing something makes it more expensive, which reduces it. First law of economics: people respond to incentives.

Or drives it to black market. Canada implemented a VAT-like GST - in a country of 30 million, the first year it was implemented an estimated $1 billion underground (non-GST-paying) economy was formed.


Only if the costs of operating a black market are less than the costs of the tax. Coal and petroleum aren't like liquor and cocaine, though. It would be massively impractical to set up a black market for energy.


The closest thing is dodgy energy accounting -- making high energy-embodied or pollution-intensive products in places outside the regime, like Chinese steel mills.


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